42 Mich. 332; Thompson v. Williams, supra; Harding v. Vandewater, supra; In re Homer etc. Gold Mines, L. R. 38 Ex. Div. 566; 1 Morawetz on Private Corporations, sec. 532.) The management of the affairs of a corporation is intrusted to its directors as a board, and the separate action of the directors individually is not, and cannot be the act of the constituted body of men clothed with corporate powers. (1 Morawetz on Private Corporations, sec. 351; 17 Am. & Eng. Ency. of Law, 83; Estate of Rittenhouse, 140 Pa. St. 172; Lockwood v. Thunder Bay etc. Co., 42 Mich. 536; Baldwin v. Canfield, 26 Minn. 43; First Nat. Bank v. Christopher, 40 N.J.L.435; 29 Am. Rep. 262; Yellow Jacket etc. Co. v. Stevenson, 5 Nev. 224; Hillyer v. Overman etc. Co., 6 Nev. 51; Stoystown etc. Co. v. Craver, 45 Pa. St. 386; Reilly v. Oglebay, 25 W. Va. 36; Herrington v. Liston etc. Township, 47 Iowa, 11; Civ. Code, secs. 305, 308, 377; Salfield v. Sutter County etc. Co., 94 Cal. 546, 549; Cammeyer v. United etc. Churches, 2 Sand. Ch. 186.) Two out of three directors at the alleged special meeting were directors not only of the cable road company but also of the bank. A director occupies a fiduciary capacity, and cannot deal with himself, or derive any benefit from his trust, and where two corpora tions have directors in common, such directors are disqualified to act in dealings between the two corporations, and contracts made where they do so act can be set aside as fraudulent. (Cook on Stock and Stockholders, sec. 658; 1 Morawetz on Private Corporations, sec. 520; San Diego v. San Diego etc. R. R. Co., 44 Cal. 106; Metropolitan Ry. Co. v. Manhattan Ry. Co., 11 Daly, 373; 14 Abb. N. C. 103; Sterling v. Smith, 97 Cal. 343; Finch v. Riverside etc. Ry. Co., 87 Cal. 597; Cumberland Coal Co. v. Sherman, 30 Barb. 553; Pickett v. School Dist. No. 1, 25 Wis. 552; 3 Am. Rep. 105; Pearson v. Concord R. R. Co., 62 N. H. 537; 13 Am. St. Rep. 590; Goodin v. Evans, 18 Ohio St. 150; Barr v. New York etc. R. R. Co., 125 N. Y. 263; Wardell v. Railroad Co., 103 U. S. 651.) did not err in excluding the books of the bank, as no foundation was laid for their introduction, by evidence

The court

that the account was kept in the regular and usual order of business, as is necessary where a party seeks to introduce his own books of account as evidence for himself. (1 Smith's Leading Cases, 9th Am. ed., 573; Watrous v. Cunningham, 71 Cal. 30; Vosburgh v. Thayer, 12 Johns. 464; Roche v. Ware, 71 Cal. 375; 60 Am. Rep. 539.) Another matter of preliminary proof that must under the authorities first be proved is where the entries are made by a clerk or bookkeeper, as in the case at bar, and the clerk or bookkeeper has no knowledge of the correctness of the items, but made them as they were furnished by another, that the correctness of the items so furnished should be shown by the party furnishing them. (1 Smith's Leading Cases, 9th Am. ed., 572; Gould v. Conway, 59 Barb. 355; Rindge v. Breck, 10 Cush. 43; Roche v. Ware, 71 Cal. 375, 377; 60 Am. Rep. 539.)

HAYNES, C.--The complaint contains several causes of action, the first four being upon promissory notes. alleged to have been executed by the San Diego Cable Railway Company to the California National Bank of San Diego, aggregating $57,330. Another cause of action is for attorneys' fees and expenses in a certain action brought by the bank against the cable company in the United States circuit court; and the last cause of action is for the sum of $359,000, for moneys alleged to have been paid by the bank to various persons at the request of the cable company for its use and benefit and upon its order. The $359,000 includes the moneys evidenced by the promissory notes sued upon in the antecedent counts.

The answer consists of specific denials of the allegations of the complaint, and a counterclaim to recover the sum of $50,000, the alleged value of certain shares of the capital stock of the cable company, and the further sum of $119,000 for moneys alleged to have been had and received by the bank to and for the use of the cable. company.

The cause was tried by the court without a jury, and

the court found against the plaintiff upon each of its causes of action, and also against the defendants upon their counterclaim, and judgment was entered accordingly. This appeal is taken by the plaintiff from the judgment against him and from an order denying his motion for a new trial. There is no appeal from the judgment upon the counterclaim.

The bank became insolvent and suspended business November 12, 1891, and the cable company was adjudged insolvent March 15, 1892.

Appellant specifies certain particulars in which the findings are claimed to be not justified by the evidence, but the principal questions arise upon rulings made upon questions of evidence; and the more important of these hinge upon the relations existing between these corporations through their respective boards of direc

tors.

The board of directors of the cable company consisted of Dare, Collins, Havermale, Palmerston, and Fisher. Of these Dare, Collins, and Havermale were officers and directors of the bank, Havermale being president and Collins cashier, while Dare was president of the cable company, Havermale vice-president, and Collins treasurer.

The promissory notes in question were executed in the name of the cable company by O'Brien, secretary, but he does not appear to have been authorized to do so by any previous resolution or formal direction of the board, nor does there appear to have been any general power conferred by the board upon the secretary to execute promissory notes or other obligations of that character on its behalf.

It is claimed by appellant, however, that these notes were ratified by the cable company: 1. By a failure of that company to dissent; and 2. By express action of the board of directors of the cable company, at a special meeting held November 28, 1891, at the house of vicepresident Havermale, at which meeting there were present Havermale, Collins, and Palmerston, of whom

Palmerston only was not interested in the bank; Dare being absent in Europe, and Fisher not having been notified. As evidence of such ratification plaintiff offered in evidence the minutes of said special meeting, as follows:

On motion of Mr. Palmerston, seconded by Mr. Collins, the following resolution was unanimously adopted:

"Resolved, That the San Diego Cable Railway, a corporation, by and through its board of directors, regularly assembled, does hereby acknowledge and agree to pay the sum of $84,330, being due the California National Bank of San Diego, and evidenced as follows: One note of $20,000, dated September 3, 1891, due December 3, 1891; one note of $10,000, dated September 3, 1891, and due December 3, 1891; one note of $10,130, dated September 3, 1891, and due December 3, 1891; one note $17,200, dated June 30, 1891, and due on demand. The sum of $27,000 placed to the credit of the S. D. Cable Railway Co. in their account with the California National Bank, on February 12, 1891, being carried in the form of a note as a cash item signed by Dare & Collins for $28,500; also, an overdraft for the sum of $9,444.27. The total principal sum being $93,774.27."

Counsel for plaintiff also stated that he expected to follow with further evidence going to show that the cable company received the money, and that it went into the construction of the road; that the business had been transacted at the bank; that the cable company obtained its money there, and that these notes were given for the debt.

Several objections were made to the introduction of said minutes, to the effect that the meeting was not called by competent authority; that it was not held at the office of the company; that the minutes do not show that notice was given to Fisher; that Fisher was in fact not notified, and that two of the three directors present were directors of the bank, and could not bind the cable company by an acknowledgment of an indebtedness to the bank.

CVII. Cal.-2

Appellant does not rely upon the authority of the secretary to execute these notes to sustain their validity. No such authority was shown; and as to the attempted express ratification, it appearing affirmatively that the meeting was special, and that the directors were not all notified, the meeting was not duly assembled, and its action did not bind the corporation as a valid corporate act. The other objections to the admission of the minutes as an express ratification of the execution of the notes need not be considered. The court, therefore, did not err in the exclusion of the resolution as evidence of express ratification, nor in refusing to receive the promissory notes in evidence in support of the causes of action based thereon. Whether they could be received in connection with other evidence, for any purpose, need not be considered in this connection.

This, however, is not conclusive of the right of the plaintiff to recover for money loaned or advanced by the bank so far as it was applied to the proper uses of the cable company. The liability of defendant does not rest upon the express contract appearing upon the face of these notes, but upon the right of the lender to recover money which has gone to swell the assets of the cable company. If the bank in fact furnished to the cable company moneys, whether as loans upon unauthorized promissory notes, or upon account, or paid money for construction of its road, or in discharge of its legal liabilities, so far as the same were in fact applied to the proper use and benefit of the cable company, such moneys may be recovered by the plaintiff to the extent to which they have not been repaid. Plaintiff in the last count of his complaint pleaded facts which, if proved, would entitle him to such a recovery. In support of this proposition see the following authorities: Morawetz on Private Corporations, secs. 526, 616, 715; Gardner v. Butler, 30 N. J. Eq. 702, 721, 724; Twin Lick Oil Co. v. Marbury, 91 U. S. 587; Santa Cruz R. R. Co. v. Spreckles, 65 Cal. 193; Seeley v. San Jose etc. Co., 59 Cal. 22. In New Castle Northern R. Co. v. Simpson,